Investors react negatively to Fed's hawkish tone
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US Markets Stocks suffered significant losses after Jerome Powell said that the Federal Reserve plans to continue tightening its monetary policy, even though inflation has apparently peaked and the economy shrunk for two consecutive quarters. - The Nasdaq lost 4.4% last week, the Dow dropped 4.2%, and the S&P 500 was down 4%.
- Declines affected stocks across the board, with 495 of the 500 companies in the S&P 500 finishing down on Friday.
- The current 10 Year U.S. Treasury yield is set at 3.04270%
| Dow Jones | 32,283.40 | -3.03% | | S&P 500 | 4,057.66 | -3.37% | | Nasdaq | 12,141.71 | -3.94% | | Russell 2000 | 1,899.83 | -3.30% | *Stock Market data as of the last closing bell. Data received directly from the reference indexes through ICE Data Services. Do you not understand any of these figures? Check out our explainer.
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Canadian Markets The Canadian housing market continues to fall, with prices in major cities seeing considerable losses since February. - This year, the average price of a home in Toronto fell more than 10% from July to August, and 6% from June to July.
- Although house prices have been falling since February, they are still up 1% year over year following gains last summer and fall.
- Economists predict housing prices will fall another 15% by the end of 2023.
*Canadian stock prices are as of the last close. Data received directly from the references indexes through ICE Data Services
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European Markets European markets were down last week after falling on Friday following the comments from Fed Chairman Jerome Powell late in the trading session. - The Stoxx 600 lost 1.7% on Friday, with all sectors down on the day.
- Retail stocks dragged down markets on Friday with a 3.5% drop, while travel and leisure stocks were just behind, losing 3.4%.
- Food delivery stocks suffered major losses. Just Eat dropped 7.8%, Delivery Hero lost 7.3%, and Hellofresh fell 7.2%.
| Euro STOXX 50 | 3,603.68 | -1.93% | | UK (FTSE 100) | 7,427.31 | -0.70% | | Germany (DAX) | 12,971.47 | -2.26% | | France (CAC 40) | 6,274.26 | -1.68% | *European stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.
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Asian Markets Asian stocks were up on Friday after avoiding the negative sentiment caused by Powell's speech at the Jackson Hole symposium. - Chinese stocks with U.S. listings saw gains following reports that the Chinese and U.S. governments are likely to reach an agreement on how these companies will be audited.
- Alibaba and Baidu both gained over 2% as a result.
- Asian stocks are expected to fall on Monday as they react to plans by the Fed to continue tightening policy.
| S&P Asia 50 | 4,637.46 | 0.73% | | Japan (Nikkei 225) | 28,641.38 | 0.57% | | South Korea (KOSPI) | 2,481.03 | 0.15% | | China (Hang Seng) | 20,170.04 | 1.01% | | India (SENSEX) | 58,833.87 | 0.10% | *Asian stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.
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Commodities After rising slightly on Friday, oil prices saw significant gains last week following two weeks of declines. - Brent crude and U.S. West Texas Intermediate both gained less than 1% on Friday.
- For the week, Brent crude gained 4.4% while West Texas Intermediate crude rose 2.5%.
- Commodities as a whole are down, with data showing that personal consumption in the U.S. is falling.
| Oil (NYSEARCA:OIL) | 32.76 | -0.80% | | Gold (NYSEARCA:GLD) | 161.76 | -1.22% | | Silver (NYSEARCA:SLV) | 17.36 | -2.09% | | Corn (NYSEARCA:CORN) | 26.77 | 2.37% | | Lumber (NASDAQ:WOOD) | 78.10 | -2.72% | *Commodity prices are as of 7am ET. Data from MarketWatch. To understand why investors track the prices of these commodities, click here.
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Currency Exchange Rates The U.S. Dollar Index was up on Friday due to the hawkish tone from Jerome Powell, who said that the Federal Reserve aims to continue tightening its monetary policy. - The index closed at 108.83, up from a low of 107.54 earlier in the session, and close to the 20-year high of 109.29 that it reached on July 14.
- The Euro continues to struggle, falling again against the six major fiat currencies.
- The next Fed interest rate decision on Sept. 20-21 will heavily impact the USD.
| UK(GBP) | £0.85 | 0.01% | | Europe (EURO) | €1.00 | 0.07% | | Canada (Canadian Dollar) | $1.30 | 0.05% | | Japan (Yen) | ¥137.59 | -0.06% | *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them, click here.
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Cryptocurrency Bitcoin fell following Jerome Powell's comments and is now trading below $20K. - Japan is considering a special Corporate Tax break for companies working in the blockchain space to encourage innovation in the industry.
- Billionaire CEO Sarath Ratanavadi of Gulf Energy said he will continue investing in cryptocurrencies because he considers that the market is stable and has strong growth potential.
- Binance plans to provide services and education to help the City of Busan, in South Korea, develop its blockchain industry.
| Bitcoin | $19,915.90 | -1.45% | | Ethereum | $1,468.03 | -1.78% | | Litecoin | $54.89 | 3.51% | | Bitcoin Cash | $117.31 | 0.99% | *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them, click here.
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 |  | Liam Gill is a founder, lawyer and investor.
He previously founded Fumarii Technologies, which became a top 20 ranked cloud computing service (Yahoo Finance! 2019) valued at over $30M. He holds an LLB Laws (UK), MSc Management and Master of Laws and currently practices law at Zargar Lawyers + Business Strategists in Vancouver, Canada.
|   | | Editor | Eduardo Garcia is a writer and editor based in New York. He is the author of "Things You Can Do," an illustrated book about climate action. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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